Cyber insurance take-up surges by 35%

24/06/2017 09:21

A new Fitch Ratings report states that cyber insurance’s direct written volume for the property/casualty (P/C) industry grew by 35% last year to $1.35 billion (£1.06 billion).

Fitch states that the $1.35 billion figure has likely underestimated the industry’s cyber premium exposure as there are natural obstacles to breaking out cyber related premium from other coverages in multi-line coverage products.

“Take-up rates for cyber insurance are increasing with frequent reports of computer hacking incidents, including: network intrusions and data theft, as well as high-profile ransomware attacks that are leading corporations to search for broader insurance protection against cyber threats,” Jim Auden, managing director, Fitch Ratings, said in an article featured on Reuters’ website.

The industry statutory direct loss ratio for stand-alone cyber insurance has enhanced last year to 45% from 50% a year earlier. However, the ultimate success of the P/C industry’s cyber insurance efforts will take some time to assess as the market matures and future cyber-related loss events emerge.

American International Group, Inc., XL Group Ltd, and ChubbLimited are three of the largest cyber insurance writers, and the companies had a combined market share in the US of about 40% at the year-end 2016.

The top 15 cyber held writers held approximately 83% of the market last year, while over 130 distinct insurance organizations reported writing cyber premiums for the year.